EUR/GBP: Trend?
Eddie Tofpik | Nov 06, 2017 05:52
Last month I wrote:
We are underneath the Medium MA resistance but above the Long MA (currently 0.8723) support. Consecutive closes above or below either of these two would likely suggest the next direction...when it comes - false breaks permitting. There is of course the Third Way, the one we're already in - sideways due to a Neutral market.
I also added:
With both the Medium and Long MAs heading higher slightly the chances are we might see a gentle rise as the Long MA approaches the market. However, this is not set in stone.
Both these statements turned out in different parts to be true. The market spent most of the first week of October pushing up over the Medium MA and it looked like by mid-month what I'd suggested would be wrong.
However, the rise over the Medium MA failed to overcome the next major resistance - the 50% Fib of the move down in August - September which has been finessed to 0.9018 today and is still valid. We spiked over it once on the way up and on the same day had a Key Reversal Down. The move lower thereafter formed a Pipe Bottom and tried once again higher but with a lower high we failed again. However, this action set in a train of events - a possible Bearish Double Top formation which has a potential target denoted by 'X' on the Daily Chart above (around 0.8540 area).
Yet the fall forming the DT had its own issues as we penetrated the Long MA support (currently 0.8761) but failed to close below and instead formed a Bullish Doji/Bull Hammer formation that saw a rapid rise the next day. Even this rise last Thursday has issues as we ran up to the Medium MA and failed with what looks like possibly a Bearish Tweezer Top formation over last Thursday and Friday. However, this is really too early to confirm but it is appropriate to note.
All this action, including false breaks, has continued the Neutral theme and that is what the bullet point will say above. However, we are seeing signs that the Sep-to-date action may be forming a Bearish Halfway Hesitation on top of the Bearish DT. This is why I have denoted ' X I ' as a possible target for such a move (0.8465 area). It is too early yet...but it is interesting.
Support is currently at 0.8834, 0.8810, 0.8761 (dynamic), 0.8730, 0.8708, 0.8692, 0.8650, 0.8600, 0.8552 - 0.8540 and 0.8465.
Resistance is currently at 0.8927, 0.8950- 0.8959, 0.9018, 0.9086 and 0.9210.
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